GENERAL COMMENTS:
The live cattle and feeder cattle contracts were able to waltz through Thursday's close with higher prices, but the lean hog contracts ran out of enthusiasm and rounded out the day lower. Hog prices closed lower on the Daily Direct Afternoon Hog Report, down $0.57 with a weighted average of $106.57 on 8,802 head. May corn is down 9 1/2 cents per bushel and May soybean meal is up $0.80. The Dow Jones Industrial Average is up 349.44 points and NASDAQ is up 269.24 points.
LIVE CATTLE:
Thursday's trade came and went and while the live cattle contracts closed slightly higher, it feels as though the market's uptick in prices came a day late as the cash market held steady this week. April live cattle closed $0.25 higher at $139.67, June live cattle closed $0.97 higher at $136.95 and August live cattle closed $0.55 higher at $137.70. Even though prices closed higher, the spot April contract is still trading for less than $140 and the June contract hasn't mustered up enough gumption to take on the 100-day average. Feedlots had a tough choice to make this past week and while some would have liked to see cattle trade $1.00 to $2.00 higher, others were worried about the flood of ready cattle that will happen in a month or so and opted to liquate supplies over pushing the cash market higher. Some light trade developed Thursday, but it was at fully steady prices with Wednesday's business. So far this week, Southern live trade has been marked at mostly $138, fully steady with last week's weighted averages; Northern dressed deals have been marked at mostly $221, steady/weak with last week's weighted average basis Nebraska. Thursday's slaughter is estimated at 122,000 head -- 3,000 head less than a week ago and 1,000 head more than a year ago.
Heading into Friday, the cattle market will be anxious for data from the Cattle on Feed report that afternoon. Placements again are the wild card for the report, and if placements are on the upper range of analysts' predictions it won't bode well for the cattle market.
Beef net export sales of 27,500 metric tons (mt) for 2022 -- a marketing year high -- were up 40% from the previous week and 29% from the prior four-week average. The three largest buyers were South Korea (9,000 mt), China (7,600 mt) and Japan (6,000 mt).
Thursday's actual slaughter data showed for the week ended 3/12/2022 steers averaged 917 pounds (down two pounds from the week before) and heifers averaged 849 pounds (up one pound from the previous week).
Boxed beef prices closed mixed: choice up $0.81 ($262.41) and select down $0.65 ($252.59) with a movement of 129 loads (82.63 loads of choice, 24.03 loads of select, 4.91 loads of trim and 17.19 loads of ground beef).
FRIDAY'S CASH CATTLE CALL: Steady. Any trade that develops throughout Friday's market will likely be for steady prices.
FEEDER CATTLE:
The grain contracts bowed lower through Thursday's close, which lent the feeder cattle contracts an opportunity to close higher. April feeders closed $0.95 higher at $162.72, May feeders closed $0.70 higher at $166.50 and August feeders closed $0.45 higher at $179.60. But even though the feeder cattle contracts walked away with a slightly higher close, the saga of a sideways chop continued as the market was unable to make any real headway. If placements on Friday's Cattle on Feed report can come in on the lower end of analysts' projections, then there's some room for the market to potentially rally. But if placements burst, it won't treat the feeder market kindly. At Winter Livestock in Pratt, Kansas, at their midsession point and compared to last week's sale, feeder steers weighing 700 to 950 pounds traded unevenly steady but feeder heifers weighing 700 to 925 pounds sold $2.00 to $3.00 higher. The market didn't have enough calves to accurately portray a test. The CME Feeder Cattle Index 3/23/2022: down $0.28, $154.69.
LEAN HOGS:
The lean hog complex saw its spot April contract close higher while the rest of the marketplace closed lower as traders face technical exhaustion. April lean hogs closed $0.22 higher at $102.77, June lean hogs closed $0.90 lower at $122.07 and July lean hogs closed $0.72 lower at $121.87. Pork cutout values rounded out the day higher and even though cash hog prices weakened some, the day's volume was still noteworthy given that packers have been only buying aggressively for one to two days out of the week, but in this week's trade they were more aggressive. As the forecast shows warm spring-like weather, it's likely packers are trying to get as many hogs committed as possible so they can capture spring/summer buying interest when consumers roll out their grills. Given that fundamental support is still strong, it's likely the market rests and chops sideways to somewhat lower but doesn't undo all of the week's profit-taking. Pork cutouts totaled 257.11 loads wit 229.13 loads of pork cuts and 27.99 loads of trim. Pork cutout values: up $1.62, $108.01. Thursday's slaughter is estimated at 477,000 head -- steady with a week ago and 11,000 head less than a year ago. The CME Lean Hog Index 3/22/2022: down $0.56, $101.21.
Pork net export sales of 23,200 mt for 2022 were down 39% from the previous week and 30% from the prior four-week average. The three largest buyers were Mexico (9,200 mt), South Korea (4,800 mt) and Japan (3,300 mt).
Thursday's actual slaughter data showed for the week ended 3/12/2022 live hog weights averaged 293 pounds (up one pound from the week before) and dressed weights averaged 219 pounds (up one pound from the previous week).
FRIDAY'S CASH HOG CALL: Steady. Given that prices were slightly lower through Thursday's market and that pork cutout values closed higher, it wouldn't be surprising to see packers actively procuring hogs all the way through Friday's end as supplies of hogs are incredibly thin.
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